Thursday, March 21, 2019

U.S. could keep tariffs on Chinese goods to ensure results; some doubt impact of more Chinese crop purchases

President Trump said Wednesday that tariffs on Chinese goods could remain for some time to ensure that China keeps its word on ending on the trade war, Chuck Abbott reports for Successful Farming.

"We’re talking about leaving them, and for a substantial period of time, because we have to make sure that if we do the deal with China, that China lives by the deal," Trump said before a trip to Ohio. "Because they’ve had a lot of problems living by certain deals, and we have to make sure."

China has promised to buy large quantities of U.S. goods, including agricultural products, to reduce its trade surplus with the U.S. But that may not help American farmers as much as trade negotiators hope. "A promise by China to buy more U.S. ag exports might carry less wallop than expected, said economist David Widmar, who parsed the impact of a rumored $30-billion-a-year pledge," Abbott reports. The U.S. Department of Agriculture "estimates that China will buy $9 billion worth of U.S. ag exports this year, a low starting point. It would take more than $10 billion in additional purchases to return to the roughly $21 billion that was sold annually to China before the trade war, he wrote at the Agricultural Economic Insights blog."

U.S. farm exports are expected to be worth $141.5 billion in fiscal year 2019, compared to FY2018's $143.4 billion, Abbott reports.

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